Social Security Financing Legislation Letter to Congressional Leaders.

I will be releasing a statement today reiterating this Administration's position that the 1977 social security financing legislation should not be changed this year. The tax increases in that legislation have saved the system from bankruptcy, protected our older citizens, and insured current workers of a sound retirement system when they retire. The magnitude of the tax increase has been exaggerated in the press and the significant increases do not occur for several years.

In my view, it would be better to act on reform of social security in a more deliberate fashion next year than to risk illconsidered legislation through hasty action this year. Congress recognized the need for careful study by creating several study groups as part of the 1977 Act.

A short-term payroll tax cut is not a substitute for the comprehensive tax reform and reduction proposals I have presented to the Congress. Those proposals will offset the higher payroll taxes for the majority of individuals, improve the fairness of our tax system, and sustain economic growth. I urge you to oppose any plan which would reduce payroll taxes at the expense of income tax reductions.

Enactment of our tax reform and reduction proposals would be a more prudent and responsible step than stop-gap action on payroll taxes. We stand ready to work with the Congress on reform in social security next year.

Sincerely,

JIMMY CARTER